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International Journal of Project Management xx (2015) xxx–xxx

JPMA-01730; No of Pages 14

Project to improve knowledge management and key businessresults through the EFQM excellence model

Arturo Calvo-Mora ⁎, Antonio Navarro-García, Rafael Periañez-Cristobal

Department of Business Administration and Marketing, University of Seville, Avda. Ramón y Cajal, 1, 41018 Seville, Spain

Received 3 September 2014; received in revised form 11 December 2014; accepted 13 January 2015

Abstract

There is a growing interest in knowledge management as a strategic weapon, although the debate continues over which are the most effectivemodels for its implementation. In this context, the main objective of this study is to analyse the potential of the EFQM Excellence Model to designand implement a knowledge management project (KMP) which improves the key results of the business. To reach the objective, a sample was usedwhich consisted of 225 companies with experience in EFQM evaluations. The partial least squares structural equation modelling approach wasused to test the model. The results show how the EFQM Excellence Model can be a valid framework upon which to implement a KMP. In addition,the use of process methodology and the involvement of suppliers and partners are key factors for KMP to have a significant impact on the keyresults of the business.© 2015 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Knowledge management project; EFQM model; Process methodology; Supplier management; Partner management; Business results; Partial least squares

1. Introduction

The economic and business reality has changed much over thelast decade. As Bueno Campos (2009) indicates, we are in the eraof knowledge, in which this resource is the most importantproductive factor that organisations must manage. Their survivaldepends, to a large extent, on the knowledge that they possessand their ability to generate, retain, transfer and operate thecapabilities of people; that is, to manage knowledge. In thiscontext, organisations have the need to implement systems tomanage their knowledge with the objective of increasing theircompetitive capacity. A knowledge management system (KMS)is a set of infrastructures and tools that support knowledgemanagement activities (Alavi and Leidner, 2001). They aresomething more than information systems, since they mustprovide a context that facilitates the creation, transfer andapplication of knowledge. Meso and Smith (2000) differentiatebetween technical infrastructure (information technologies) and

⁎ Corresponding author. Tel.: +34 954554436; fax: +34 954556989.E-mail addresses: [email protected] (A. Calvo-Mora), [email protected]

(A. Navarro-García), [email protected] (R. Periañez-Cristobal).

http://dx.doi.org/10.1016/j.ijproman.2015.01.0100263-7863/00/© 2015 Elsevier Ltd. APM and IPMA. All rights reserved.

Please cite this article as: A. Calvo-Mora, et al., 2015. Project to improve knowexcellence m o d e l , I n t . J . Proj1.010

ledge

that of a social and cognitive nature (organisational structure,human resources and culture). In practise, the implementation ofKMS is not free from obstacles (Lee and Choi, 2003) as itrequires important organisational and technological changes. Inthis sense, it can be appropriate for organisations to use othermanagement systems that have already been consolidated, suchas those of total quality, which serve to support initiatives ofknowledge management (KM) (Adamson, 2005; Ju et al., 2006).

Total quality management (TQM) is a comprehensivemanagement philosophy oriented towards achieving excellentresults in relation to stakeholders (Prajogo and McDermott,2005). In order to attain these results, it is crucial to be able tocount on the commitment and involvement of all the peoplewithin the organisation, as well as the use of certainmanagement tools, techniques and practises (Din et al, 2011;Rahman, 2004).

Different frameworks exist to implement the principles andpractises of TQM.Yusof and Aspinwall (2000) differentiate threetypes: (1) those based on experts or gurus of quality (Deming's14 principles, Juran's Quality Trilogy, and Crosby's Absolutes ofQuality Management Principles); (2) the excellence models orquality awards (Deming Prize, the Malcolm Baldrige National

management and key business results through the EFQM

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http://dx.doi.org/10.1016/j.ijproman.2015.01.010





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2 A. Calvo-Mora et al. / International Journal of Project Management xx (2015) xxx–xxx

Quality Award—MBNQA, or the European Quality Award—EFQM model); and (3) those extracted following theoreticaland/or empirical research or measurement studies (Andersonet al., 1994; Flynn et al., 1994; Saraph et al., 1989). Bou Llusaret al. (2009) and Calvo-Mora et al. (2014a) point out how the useof the excellencemodel guarantees that the management practisesemployed, form a coherent system.

In Europe, the EFQM Excellence Model is the best-knownand most widespread reference when introducing and improvinga TQM system. This model establishes the organisation's strategyand allows the managers to understand the cause–effectrelationships which exist between what the organisation does(enablers' criteria), and the results that it achieves (results'criteria).

The aim of the EFQM Excellence Model is to supportorganisations to achieve business excellence through continu-ous improvement, learning and innovation. This involves usinga mixed methodology which includes self-assessment andexternal evaluation processes (undertaken by independentexperts) to give validity to the initial diagnosis made by theorganisation itself. Information is gained from these processesabout what the organisation is doing to achieve its objectives,how its plans, planned programmes and processes aredeveloping, what resources and alliances it has to reach itsobjectives, as well as the impact that its actions have had on itsprincipal stakeholders (EFQM, 2003). The level of excellencecan only be diagnosed by the contextualisation and detailedanalysis of the information, which is the starting point for theproduction of the action, improvement and learning plans.

The implementation of the EFQM Excellence Model allowsknowledge to be obtained about the degree of development,effectiveness and efficiency of the internal management process-es (Calvo-Mora et al., 2014a; Weske, 2007). Furthermore, itfavours the implementation of a methodology for the monitoring,control and improvement of the processes in a systematic manner(Asif et al., 2013; Molina et al., 2007; Ooi, 2009). Performanceimprovement also depends on the indispensable strengthening ofthe external alliances and relationships which the organisationhas with suppliers, distributors, customers and other strategicpartners. These alliances and relationships generate synergies andincrease the opportunities for the exploitation and exploration ofnew ideas and knowledge (Daud and Yusoff, 2011; Ju et al.,2006; Molina et al., 2007). The information about the previouslymentioned factors (Knowledge, Process methodology andmanagement, Supplier/partner management and Key results)cannot be obtained by means of the traditional or vertical analysisof the EFQM Excellence Model, that is to say, by analysing eachcriterion independently when these factors are related to othercriteria of the Model in a horizontal or transverse manner. Thehorizontal Reading of the EFQM Excellence Model through thetransversal axes is not as obvious as the vertical, but it is apowerful tool for analysing concepts important to the organisa-tion (Fernández-Santos et al., 2010).Within the present study thishorizontal or transverse perspective is used to analyse thepossible start-up of a knowledge management project (KMP).This will begin with the information and knowledge that theorganisation obtains from its internal processes and from its main

Please cite this article as: A. Calvo-Mora, et al., 2015. Project to improve knowledge mProj. Manag. http://dx.doi.org/10.1016/j.ijproman.2015.01.010

partners and external collaborators. Finally, the effectiveness ofthe KMP is examined through the impact on the key results of thebusiness, both operational and strategic.

The literature contributes evidence of relationships betweenquality management and KM practises. These relationships havebeen analysed taking as reference the ISO 9000 family ofstandards (Lin and Chuni, 2005; Marcus and Naveh, 2005;Molina et al., 2004; Tang and Tong, 2007) and some TQMprinciples and practises (Honarpour et al., 2012; Hsu and Shen,2005; Ooi, 2009; Ribière and Khorramshahgol, 2004). However,there is a lack research that empirically analyses the suitability ofthe EFQM Excellence Model as a reference framework for aKMP implementation. Neither have studies been identified thatuse the horizontal reading of the EFQM Excellence Model as abasis for making a diagnosis about KM and the later developmentof improvement and strengthening plans.

For that reason, the present study poses the followingresearch questions:

(1) Can the organisations which institute TQM develop aKMP using the experience provided by assessmentthrough the horizontal reading of the EFQM ExcellenceModel?

(2) Are the critical factors of process, supplier and partnermanagement of TQM useful for strengthening a KMPstart-up?

(3) Does the KM process, in the EFQM Model framework,affect the key strategic and operational results oforganisations?

In order to answer the proposed questions, this paper isorganised as follows. Firstly, the literature on KM and EFQMExcellence Model is analysed. Secondly, the research modeland the hypotheses are presented. This is followed by theresearch method and results. Finally, the conclusions arepresented and the limitations and further research of the studyare described.

2. Theoretical background and hypotheses

2.1. The EFQM Excellence Model

Organisations need to establish an appropriate managementsystem to achieve success, irrespective of the sector, size orstructure. Here, the EFQM Excellence Model sets out apractical and non-prescriptive management system that allowsorganisations to (Suárez et al., 2014): (1) prepare a basicstructure for the design, implementation and improvement of acomprehensive management system; (2) evaluate their positionon the path towards excellence, identifying their strengths andweaknesses as a starting point for the establishment ofstrengthening and improvement plans; (3) prepare a commonframework and language that favours effective communicationwithin the structure and (4) systematically integrate thestrategic planning and interest group orientation into theirmanagement.

anagement and key business results through the EFQM excellence model, Int. J.


3A. Calvo-Mora et al. / International Journal of Project Management xx (2015) xxx–xxx

To achieve sustained success in management the EuropeanFoundation for Quality Management propose the integration ofthree components (Fig. 1): fundamental concepts of excellence,EFQM Excellence Model criteria and the RADAR logicscheme.

The eight fundamental concepts of excellence outline thefoundation for achieving sustainable excellence in any organisa-tion. They can be used as the basis to describe the attributes of anexcellent organisational culture and help to establish a commonlanguage for senior management. The fundamental concepts ofexcellence are: results orientation; customer orientation; leader-ship and consistency; management by processes and facts;development and involvement of people; development ofalliances; continuous process of innovation, learning andimprovement and responsibility of the organisation.

The above principles are translated and summarised into ninedimensions or criteria which serve as a guide for the implemen-tation of the management system and the measurement of theresults that are being achieved by the organisation. The ninecriteria that the model proposes represent the indicative elementsof the degree of progression which a certain organisation followsto achieve excellence.

These criteria are specified in five key implementation factorsor enablers (leadership, policy and strategy, partnerships andresources, people and process), and the four remaining dimen-sions reflect the results which the organisation attains, concerningtheir customers, employees, society and other key results. Each ofthe nine criteria are accompanied by a definition which explainsits significance. To develop each criteria with more detail, thesecontain a variable number of sub-criteria (for example, theleadership criterion has 5 sub-criteria, whilst the Results criterionin Customers has two sub-criteria). In total, the EFQMExcellence Model considers 32 sub-criteria to approach whenmaking a complete self-assessment of the organisation (Fig. 2).Finally, each sub-criterion includes a non-exhaustive norobligatory list of elements to take into account, the objective of

)

Deploym

Resu

Approach

Fundamental Concep

RADAR LOGIC

Fig. 1. EFQM Excellence


which is to provide examples which clarify the significance of thesub-criteria, and guide the self-assessment of the organisation.Specifically, there are a total of 174 elements to consider.

Moreover, the EFQMExcellence Model has a dynamic nature.It indicates that activities such as innovation, learning or creativity,boost and empower the impact that the model's enablers have onthe results. This refers to the system's continuous improvement inthe search for excellence (EFQM, 2003).

Finally, the RADAR (Results, Approach, Deployment andAssessment and Review) logic scheme provides a structuredfocus with which to undertake the self-assessment based on theEFQM Excellence Model. The elements of Approach, Deploy-ment, Assessment and Review are applied for the enablers'criteria, and analyse the evidence of what the organisation isdoing. The Results element is used to assess the results' criteria.This analyses what the organisation achieves as a consequenceof the efforts made.

2.2. Knowledge issues in the EFQM Excellence Model

Benavides andQuintana (2003);Martín-Castilla andRodríguez-Ruiz (2008) and Westerveld (2003) maintain that the EFQMExcellence Model constitutes an element of stimulus andimpetus for the implementation of a KMP. Furthermore, itprovides a cultural framework that favours the effectiveness ofthe KM process.

Consequently the fundamental concepts of excellence ap-proach issues related to KM. More specifically, the “Develop-ment and involvement of people” principle expressly mentionshow excellent organisations recognise the increasing importanceof the intellectual capital of those who comprise them and usetheir knowledge to the benefit of the whole organisation. Inaddition, the “Continuous process of learning, innovation andimprovement” principle indicates that excellent organisations,through benchmarking activities, must continuously learn, andgather and share the knowledge of the people who comprise

)

)

ent

Assessment and Review

lts

ts of Excellence

Model components.


image of Fig.�1


1. Leadership

(5 sub-criteria:

1a to 1e)

3. People

(5 sub-criteria:

3a to 3e)

2. Policy &

Strategy

(4 sub-criteria:

2a to 2d)

4. Partnership

& Resources

(5 sub-criteria:

4a to 4e)

5. Process

(5 sub-criteria:

5a to 5e)

7. People

Results

(2 sub-criteria:

7a and 7b)

6. Customer

Results

(2 sub-criteria:

6a and 6b)

8. Society

Results

(2 sub-criteria:

8a and 8b)

9. Key Results

(2 sub-criteria:

9a and 9b)

5 Enablers ´ criteria 4 Results´ criteria

Learning and innovation (Continuous improvement)

1. Leadership

3. People

2. Policy &

Strategy

4. Partnership

& Resources

5. Process

Selected Transverse axes

Suppliers /Partners Sub-criteria: 1c, 2a, 2c and 4a

Process methodology Sub-criteria: 1b, 2d, 5a and 5b

9. Key Results

(Sub-criteria:

9a and 9b)Knowledge Sub-criteria: 2b, 3b and 4e

Horizontal interpretation of EFQM Model

Vertical interpretation of EFQM Model

RADAR

Self assessment and external evaluation:

• Improvement plans

• Strengthening plan

• Implications for managers

Fig. 2. Vertical and horizontal interpretation of the EFQM Excellence Model.


them, to maximise the learning in the whole organisation.Furthermore, the “management by processes and facts” principlerefers to the need to manage based on the information andobjective knowledge about the development of the key processesof the organisation. Finally, the principle “Development ofalliances” establishes how partners must work together to reachcommon objectives, each helping the others with theirexperience, resources and knowledge (EFQM, 2003). Theseconcepts determine the set of cultural values and principleswhich serve as a framework for the management of excellence,and which are specified in the nine criteria of the EFQMExcellence Model.

This is why the criteria of the EFQM Excellence Model refer,in the sub-criterion 3b of the People criterion, to the need toidentify, develop and maintain the knowledge and the abilities ofthe people. For this, it is necessary to assess (1) how theknowledge and the competences of the personnel are identified,classified and adapted to the needs of the organisation; (2) howtraining and development plans are developed and implementedwhich contribute to guaranteeing that the abilities of thepersonnel are adjusted to the present and future needs of theorganisation; (3) how learning opportunities are designed and


promoted at the individual, group and organisational level. Inaddition, the “Alliances and Resources” criterion, in sub-criterion4e, expressly mentions information and knowledge management.In particular, it analyses how the organisation (1) managesinformation and knowledge in support of policy, strategy andobjectives; (2) identifies the current information and knowledge;(3) provides suitable access to important information andknowledge; (4) uses information technology to support internalcommunication and information and knowledge management;(5) cultivates, develops and protects the intellectual property tomaximise its value for the customer; (6) tries to acquire, increaseand use knowledge effectively; and, (7) generates a climate ofinnovation and creativity in the organisation by means of suitableinformation and knowledge resources. Aspects related to KM canalso be identified in other criteria of the EFQM ExcellenceModel, although these aspects are not specifically mentioned. Forexample, the “Leadership” criterion refers to practises that helpknowledge creation: the promotion of empowerment, creativityand innovation, or establishing incentives so people and groupsparticipate in improvement activities. The “Processes” criterionalso identifies aspects related to the application of knowledgewhen the need is mentioned to manage the information that


image of Fig.�2



comes from the customers for the development of new productsand services.

As mentioned previously, in this vertical interpretation ofthe EFQM Excellence Model, KM is only approached insub-criterion 4e, however, the KM issues are included withinother sub-criteria of the model.

The interpretations of the relationships between the sub-criteria are made through the horizontal interpretation of themodel, more specifically in the so-called transverse axes of themodel. The existence of these axes implies that, by adopting asystemic management approach, when starting up improve-ment projects in any one of the processes or practises ofthe organisation, effects will be obtained in more than onecriterion. This means global improvements in the organisationcannot be achieved if the different aspects of the criteria of themodel are not simultaneously approached as interdependentelements (Fernández-Santos et al., 2010). The EFQM ExcellenceModel contemplates a non-exhaustive number of transverse axeswhich refer to the critical aspects of the organisation's manage-ment. Amongst these axes, critical aspects can be identified thatare directly related with the KM process and which, according tothe specialised literature analysed, are fundamental for successwhen designing and implementing a KMP (Fig. 2).

These critical aspects are (1) “knowledge”, including aspectsrelated to individual knowledge, organisational knowledge andthe integration of individual and organisational knowledge(Honarpour et al., 2012; Hsu and Shen, 2005; Ooi, 2009);(2) “process methodology”, due to knowledge of the organisa-tion becoming formalised and more explicit through processes,which favours its creation, transfer and diffusion (Asif et al.,2013; Hsu and Shen, 2005; Molina et al., 2007; Ooi, 2009);and (3) “supplier and partner management”, as, apart from theinformation derived from the internal processes, the manage-ment of the information and knowledge which comes fromthem is increasingly important (Daud and Yusoff, 2011; Ju etal., 2006; Molina et al., 2007). Finally, the “key results of thebusiness”, attempts to determine what benefits the organisationis reaching in relation to the planned economic–financial,market and process results and the efficiency in the manage-ment of the tangible and intangible resources.

2.3. Integrating the EFQM Model framework, processmethodology and supplier/partner management in the knowledgemanagement process

There are different approaches to the concept of knowledge,as it is a complex, broad and abstract term (Alavi and Leidner,2001). One of the more accepted definitions is that of Nonaka(1994) for whom knowledge is a dynamic human resource ofjustification of the personal beliefs to obtain the truth. AsSegarra Ciprés and Bou Llusar (2005) indicate, this vision ofknowledge emphasises its active and subjective nature. Moreclarifying is the definition of Davenport and Prusak (2000) forwhom knowledge is a flow that combines values, experiences,abilities and attitudes that facilitate a framework of analysis forthe assessment and new incorporation of experience andinformation. Knowledge is originated, stored and applied in


the mind of individuals, and in organisations, it is found in theorganisational routines, processes, practises, regulations andother documents.

As is apparent from the previous definition, there aredifferent types of knowledge. Tacit knowledge resides inactions and experiences and comprises part of a specificcontext, which is why it is more difficult to formalise and totransfer or to communicate (Alavi and Leidner, 2001). On theother hand, explicit knowledge refers to knowledge that can beeasily articulated or formalised in documents, manuals andprocedures (Nonaka and Takeuchi, 1995). From the point ofview of management, the difference between knowledge thatresides in the person (individual knowledge) and that whichbelongs to a social group or the organisation itself as a whole(organisational knowledge) is also important (Segarra Ciprésand Bou Llusar, 2005).

KM is a set of processes by which an organisation makes useof its individual and collective intelligence to reach its strategicobjectives (Grant, 1996). In addition, KM is a process thatinvolves a series of activities related to the creation/acquisitionof knowledge, its storage/retention, its transfer/diffusion and itsapplication/use (Alavi and Leidner, 2001; Davenport andPrusak, 2000) (Fig. 3).

Before starting the KM process, the organisation mustidentify and measure the knowledge it already has at theindividual and organisational level. A large part of thisknowledge is found formalised (explicit knowledge) andlocated in the internal processes of the organisation (Asif etal., 2013). The non-formalised knowledge (tacit knowledge) isfound using the self-assessment methodology of the EFQMExcellence Model which makes an in-depth analysis of whatthe organisation does, who does it and where it is done (EFQM,2003). Next, the organisation will have to estimate theknowledge it needs. This knowledge will be determined bythe environment and by the key elements needed to competewithin it. Therefore, the relationships which the organisationhas with its main suppliers, customers, partners and competitorswill contribute a large part of the information it needs toestimate this knowledge (Daud and Yusoff, 2011).

2.3.1. Knowledge generationWhen the organisation knows what knowledge it has, and

what knowledge it is going to need, it can determine itsknowledge gap and reflect on the best way to cover this gapthrough knowledge generation (Davenport and Prusak, 2000).This phase of knowledge generation is very important for thefuture development of the organisation because it allows it tocontinuously adapt to environmental changes (Zack et al.,2009). More specifically, knowledge creation stems from theinteraction between tacit and explicit knowledge in theirindividual and organisational aspects (Nonaka and Takeuchi,1995). Furthermore, this process can be directed towards thedevelopment of activities which generate new knowledge(exploration), or towards activities that apply existing knowl-edge to new uses (exploitation). In general, knowledge can begenerated through activities directed to the internal creation ofknowledge or to the acquisition of external knowledge



EFQM Model framework

Knowledge Generation

Knowledge Storage/Retention

Knowledge Transfer/Diffusion

Knowledge Application

Knowledge Management Process

Identification and measurement of knowledge

Key business results(Operational and strategic)

Suppliers/ Partners

management

Processmethodology

Fig. 3. Knowledge management process and EFQM Excellence Model framework.


(Davenport and Prusak, 2000). In the first case, the generatedknowledge tends to be tacit, specific and unique, and thereforedifficult to imitate by the competitors. The acquisition ofknowledge is the fastest way to generate knowledge, althoughthe knowledge must have a certain degree of formalisation andthe source must be selected with care. Benavides and Quintana(2003) point out that, for this phase to develop suitably, it isnecessary for it to be undertaken in an atmosphere that favourscommunication, creativity and change. These principles andvalues are very evident in companies that implement excellencemodels such as that of the EFQM (Bou Llusar et al., 2009).

2.3.2. Knowledge storage/retentionOnce the knowledge is generated it will have to be summarised

and stored so that it can be transferred to the individual, groups orunits that need to apply it. The stored knowledge will form part ofthe organisational memory (Johannsen, 2000). Therefore, thereports from the self-assessment and external evaluation processescan be a good example of a source which nourishes theorganisational memory. The report is a strong tool for capturingrelevant information from the different departments and activitiesof the organisation, as well as for maintaining it and accessing iteasily. There are software programmes available for this purposesuch as the PERFIL tool. This is a powerful tool for performingself-assessments, in accordance with the requirements of theEFQMExcellenceModel and the RADAR logic, which facilitatesand simplifies the diagnosis. PERFIL's innovative graphicanalysis interface captures the assessment data and displays the


results, in real time, in a varied spectrum of representations, bothnumeric and graphic. Furthermore, it provides information on thestrong points and areas for improvement, as well as positioningreports with respect to other similar organisations.

2.3.3. Knowledge transferThe suitable storage and structuring of the generated

knowledge facilitates the transfer of best practise (Szulanski,1996). This phase is critical for the success of the KM process,as the transfer must produce changes in the knowledge base andin the abilities of the people, groups and organisations thatintervene in that process (Argote and Ingram, 2000). Thetransfer of knowledge can be realised through information or bymeans of experience, within the organisation itself or betweenorganisations.

Knowledge is transferred with the information throughcommunication media. This is a more effective method todisseminate explicit knowledge, and to larger groups of people.However, the transfer of non-formalised (tacit) knowledgebetween people is more effective through experience, that is, bymeans of practise based learning (Sveiby, 2001). The use of theEFQM Excellence Model can facilitate the transfer ofknowledge through information and experience. Thus, theassessment results provide valid, reliable and formalisedinformation on what the organisation is doing efficiently (bestpractise) and on those aspects that should be improved, and canbe spread internally between the different departments withease and rapidity. Furthermore, the self-assessment process and


image of Fig.�3



the later implementation of improvement and strengtheningplans are put into effect through the formation of improvementteams or groups which create a climate which favours theExchange of experiences and mutual learning (Tarí Guilló etal., 2007). Teece (2007) indicates how other types ofknowledge that are necessary to compete are found in otherorganisations and groups (suppliers, customers or competitors),that is, it may be necessary that transfer also occurs betweenorganisations. In this case, the use of the EFQM ExcellenceModel allows information to be obtained and disseminated, asthis establishes permanent communication links with thesegroups. Furthermore, ad-hoc groups may be constitutedbetween the organisations to facilitate better knowledge of thepartners and the Exchange of experiences (Samuelsson andNilsson, 2002).

2.3.4. Knowledge applicationThe main object of the KM process must be to generate

value for the agents which intervene in the process. To that end,the generated, stored and transferred knowledge must beapplied or used in an efficient manner. For this reason, theuptake capacity of the individuals, groups and organisations is acritical aspect (Zahra and George, 2002). As a consequence ofthe uptake of knowledge, learning is produced which provokesthe adoption of new beliefs, new relationships, modification orreinforcement of behaviour and values, as well as other types ofmore practical improvements such as those related to workingmethods, in operations or in processes (Leal-Rodríguez et al.,2014). In this respect, the use of the EFQM Excellence Modelstrengthens a continuous process oriented towards improve-ment and learning, that is, the self-assessment does not onlyseek to obtain information on the degree of excellence anorganisation reaches in its key activities and its results, but usesthat information and diagnosis to learn and improve.

From the above, it is concluded that process methodologydescribes what the organisation does and, consequently, makesits knowledge and capacities explicit (Tang and Tong, 2007).Therefore, process management facilitates the creation ofknowledge (Asif et al., 2013; Marcus and Naveh, 2005), asthe processes include concepts, methods and techniques tosupport the design, implementation and analysis of theactivities that generate value. Accordingly, the informationderived from the activities that form the processes aretransformed into knowledge (Weske, 2007). Process manage-ment also favours the storage and the transfer of knowledge(Molina et al., 2007) when cooperating to transform it fromtacit to explicit. In addition, the implementation of processmanagement changes the structure of the company, making itmore open and flexible. In this climate, the transfer anddiffusion of knowledge is strengthened (Linderman et al.,2004). The main objective of process methodology is toestablish a system to be able to monitor the processes whichallow the organisation to learn and introduce continuousimprovements (Choo et al., 2007).

In this context, process methodology also offers a frame-work that enables knowing, integrating and improving the keyactivities, or which add value, for both partners of the alliance


(Spekman et al, 2002). Thus, efficiency in the development ofthe operation and activities in which the partners take part,facilitates the satisfaction of the expectations of both and,therefore, it increases the confidence in the alliance and itspossibility of success (Fleming and Low, 2007). Other criticalelements for success are communication, honesty and transpar-ency between the parties. For that reason, organisations usuallyintegrate suppliers and partners into their management systems(Martín-Castilla and Rodríguez-Ruiz, 2008), in which processmethodology is an indispensable requirement so that thesystems fulfil their objectives. Therefore, we propose thefollowing hypotheses:

H1. In the EFQM Excellence Model framework processmethodology positively affects the management of knowledge.

H2. In the EFQM Excellence Model framework process method-ology positively affects supplier and partner management.

On the other hand, companies that maintain excellentrelationships with their suppliers and partners can take advantageof synergies and access and exchange new or complementaryknowledge, which allow the generation of value for both parties(Daud and Yusoff, 2011). This exchange of knowledge can evenbe obtained without having to produce explicit knowledge, as itcan be made through the exchange of people or groups withcommon objectives and cultures which will be able to worktogether effectively (Davenport and Prusak, 2000).

As noted previously, confidence between the partners is animportant factor that influences the effectiveness of knowledgetransfer. Confidence is associated to the belief that organisa-tions act coherently and according to expectations (Spekman etal., 2002). Confidence is closely related to the risk and theprotection of knowledge. A reduction in confidence betweenorganisations will be translated into a greater risk of losingcritical knowledge. On the contrary, confidence will encouragethe actors to actively share their knowledge, ensuring that thiswill not be used against their objectives (Linderman et al.,2004). Therefore, it is hoped that an organisation that hasgreater levels of confidence in its collaborative relationshipswith its suppliers and partners manages knowledge in a bettermanner (Loke et al., 2012). Accordingly, we propose thefollowing hypothesis:

H3. In the EFQM Excellence Model framework supplier andpartner management positively affects knowledge management.

Finally, to complete the research model (Fig. 4), therelationship between KM and business results is considered.Grant (1996) considers that knowledge is the most importantstrategic resource that organisations can have. Thus, the effectivemanagement of this resource is a source of competitive advantagethat will lead to an improvement of the results (Prahalad andHamel, 1994). The key results in the EFQM Excellence Modelattempt to measure what the organisation obtains in relation toits strategic results and planned yield. More specifically, thestrategic key results of the economic–financial type (salesvolume, share or dividend prices, gross margins, share profits,profits before interests and taxes or operating margin), as well



Fig. 4. Research model and hypotheses.


as those of a non-economic nature are analysed (market share,time of launching new products, success indices, processperformance) which show the success achieved by the imple-mentation of the strategy. The positive relationship betweenknowledge management and financial results has been confirmedin the studies of Darroch and McNaughton (2003); Huang andShih (2009) and Tanriverdi (2005). More specifically, Tarí Guillóand García-Fernández (2013) reach the conclusion that theprocesses of creation, storage, transfer and application ofknowledge influence economic results through greater productdiversification, greater client loyalty and increased automaticcontrol over the work.

The key economic–financial indicators (treasury, deprecia-tion, maintenance costs, credit qualification) and non-economicindicators (performance of processes, partners and suppliers,external resources and alliances, buildings, equipment andmaterials, technology, information and knowledge) which theorganisation uses to measure its operational efficiency. Hence,studies like those of Lee and Choi (2003); Simonin (1997); TaríGuilló and García-Fernández (2013) and Zack et al. (2009)indicate how knowledge management contributes to improvingthe operational results through the development of a globalvision of the company, empowerment, and improvement indecision making, reduction of errors, teamwork or the trainingand qualification of the workers. Therefore, the followinghypothesis is proposed:

H4. In the EFQM Excellence Model framework knowledgemanagement positively affects the key results of the organisation.

3. Methodology

3.1. Sample

According to data supplied by the Centros de Excelencia(an association that represents the bodies which manage theExcellence Awards of the different Autonomous Communities


of Spain), the total number of organisations that submittedcomplete evaluations during the period 2003–2010 rose to 355.After contacting the different territorial associations, a total of225 (63.4%) complete evaluations were received.

The sample includes large, as well as small and mediumsize companies (SMEs). According to the definition by theEuropean Commission 96/280/EC, SME's will be consideredto be those companies which employ less than 250 people,whose annual business volume does not exceed 50 millioneuros or whose annual general balance sheet figures do notexceed 43 million euros.

In addition, the sample also includes companies from themain sectors of activity (primary, secondary and tertiary), aswell as publically and privately owned companies (Table 1).

3.2. Measures

The variables and their respective measurement indicatorswere obtained from the transverse axes of the EFQM ExcellenceModel (EFQM, 2003). In this study, and according to theobjectives considered, three transverse axes were selected(knowledge, process methodology and suppliers and partners),as well as the key results of the business (Table 2; Fig. 5).

The data were collected from the assessment processesaccording to the RADAR (Results–Approach–Deployment–Assessment and Review) logic which the EFQM ExcellenceModel uses to score the level of excellence of organisations.The Approach, Deployment, Assessment and Review elementswere applied for the Enablers, and must analyse the evidence ofwhat the organisation is doing. The Results element was used toassess criteria related to the results, and analyse what theorganisation obtained as a result of its efforts.

The points scale of the RADAR matrices for the Enablers isdivided into 5 intervals which range from value 0 (withoutevidence or anecdotal) to value 100 (total evidence). TheResults scale also varies between 0 and 100, but the meaning ofthe extreme values changes according to the type of result that


image of Fig.�4


Table 1Sample characteristics.

Frequency Percentage

Ownership of the capitalPrivate 188 83.5Public 37 16.5Total 225 100

SizeSmall and medium 146 64.8Large 79 35.2Total 225 100

Sphere of activityServices 161 71.5Industry and construction 45 20Agriculture 19 8.5Total 225 100

Table 2Measures.

Variable/indicator EFQMSub-criterion

Process methodologyDevelopment of a process management system and to assign itsproprietors

1b

Identify and develop the key process diagram 2dDescription of the system to design and to manage processes 5aDescription of the system oriented to the improvement ofprocesses

5b

Suppliers/partnersInvolvement of the leaders with suppliers and partners 1cEstablish needs and expectations 2aBalance needs and expectations 2cManage alliances 4a

KnowledgeContributions of knowledge to the policy and strategy of theorganisation

2b

Identification, development and maintenance of the knowledgein the personnel

3d

Management of the organisation's knowledge 4e

Key resultsKey performance outcomes. These measurements include:(1) Economic and financial results: General data (sales volume,share or dividend prices); Aspects related to profitability (grossmargins, share profits, profits before interests and taxes oroperating margin); Information about investments and assets(profitability of invested capital, of net assets or of capitalused).(2) Non-economic results: Market share, time of launchingnew products, success indices, process performance, etc.

9a

Key performance indicators. These measurements include:(1) Economic and financial measurements: treasury,depreciation, maintenance costs, credit qualification, etc.(2) Non-financial measurements: Processes (performance,assessments or innovations); External resources (performanceof suppliers, number and added value of partnerships, numberand added value of joint improvements attained with partners);Buildings, teams and materials (indices of defects, inventoryrotation, use); Technology (rhythm of innovation, value ofintellectual property, patents, royalties); Information andknowledge (accessibility, integrity, value of intellectualcapital).

9b


is being analysed (trend of the results, fulfilment of objectives,comparisons with other companies, causes of the results orsphere of application). The RADAR logic is a dynamicassessment framework and a powerful management tool thatprovides a structured approach to questioning the performanceof an organisation (Williams et al., 2006).

3.3. Data analysis

The research models depicted in Fig. 1 were tested using avariance-based, structural equation modelling (partial leastsquares—PLS-). PLS allows the assessment of the measure-ment model and testing of the linkages proposed betweenconstructs (Roldán and Sánchez-Franco, 2012). The choice ofPLS in this study is based on the following reasons: (1) thisresearch is focused on the prediction of dependent variables andtackles a theory building environment (exploratory analysis);(2) the sample is not too large (n = 225), and followingReinartz et al. (2009, p. 342) “PLS should be the method ofchoice for all situations in which the number of observations islower than 250”; and, (3) PLS is the best option if theresearcher needs to use scores of latent variables in lateranalyses for the purpose of predictive relevance. SmartPLS2.0.M3 software was used (Ringle et al., 2005).

4. Results

As Roldán and Sánchez-Franco (2012) describe, the PLSmethodology starts from the graphical description of thestructural or internal model, that is, from a representation bymeans of symbols of the relationships existing between thelatent variables (constructs), and of the relationships existingbetween the indicators and the constructs of the measurementor external model (Fig. 5). The latent variables are representedby means of circles, being able to distinguish betweenindependent (exogenous constructs) and dependent variables(endogenous constructs). In this particular case, the indepen-dent variable would be the process methodology construct, therest being endogenous constructs. The arrows and theirdirection indicate the predictive relationships between the


latent variables. These relationships constitute the hypothesesof the model supported in the theoretical knowledge on TQMand KM.

Roldán and Sánchez-Franco (2012) indicate two stages inany PLS analysis: the assessment of the measurement modeland the evaluation of the structural model.

4.1. Measurement model

Given that the measurement model has been designed asreflective, its assessment has to be based with regards toreliability and validity (Roldán and Sánchez-Franco, 2012). Inthis vein, loadings of both indicators and dimensions exceed the0.707 threshold. Consequently, indicators and dimensions arereliable. Constructs and dimensions present high internalconsistency, as its composite reliability indices are above 0.7.



Processmethodology

Suppliers/ Partners

KnowledgeKey

Business ResultsH2

H1

H3

H4

1b 2d 5b5a

1c 2a 4a2c

2b 3b 4e

9a

9b

Fig. 5. Graphical description of the model.


In addition, the convergent validity is achieved for all latentvariables because the average variance extracted (AVE) ratiosexceed the 0.5 benchmark (Table 3).

Finally, Table 4 shows that the square root of the AVE ofeach latent is greater than its correlations with any other latentvariable. Thus, the discriminant validity is reached, and it canbe concluded that the main constructs measure differentaspects.

Table 3Measurement model.

Construct/indicator Loadings Composite reliability AVE

Process methodology 0.9120 0.72211b 0.87202d 0.86895a 0.77525b 0.8786Suppliers/partners 0.9240 0.75271c 0.86852a 0.91472c 0.86954a 0.8146Knowledge 0.8925 0.73482b 0.89443b 0.84904e 0.8268Key business results 0.9534 0.91099a 0.95239b 0.9565

4.2. Structural model

The structural model was evaluated based on the algebraicsign, magnitude and significance of the structural pathcoefficients, the R2 values, and the Q2 (redundancy) test forpredictive relevance (Roldán and Sánchez-Franco, 2012).Consistent with Hair et al. (2013), bootstrapping (5000resamples) was used to generate standard errors, t-statistics,and percentile 95% confidence intervals.

The endogenous constructs achieve R2 values higherthan 0.45, even attaining an outstanding figure of 0.798 forthe knowledge factor. This is higher than the substantiallevel indicated by Chin (2010). The predictive relevanceof the theoretical/structural model is assessed with thecross-validated redundancy index (Q2) for endogenous con-structs. Since all Q2 values are greater than 0, we foundevidence that our model has predictive relevance (Chin, 2010)(Fig. 6 and Table 5). In addition, Table 5 shows the amount ofvariance that each antecedent variable explains on each dependentvariable.


A predicting variable would have to explain at least 10% (0.1)of the variance of the variable that it predicts (Roldán andSánchez-Franco, 2012). Chin (1998) considers R2 values of 0.67,0.33, and 0.19 as substantial, moderate, and weak, respectively.In our case, all the relationships set out in the structural modelfulfil this rule. The influence exerted by the process methodologyvariable on the rest of the variables is emphasised whenexplaining the more than 20% of the explained variance of theknowledge variable and more than 67% of the suppliers/partnersvariable. It is also worth emphasising the importance of the


image of Fig.�5


Table 4Discriminant validity.

Processmethodology

Suppliers/partners

Knowledge Key businessresults

Process methodology 0.8497Suppliers/partners 0.8213 0.8675Knowledge 0.8065 0.8316 0.8572Key business results 0.5616 0.6594 0.6769 0.9544

Note: Diagonal elements (bold) are the square root of the variance sharedbetween the constructs and their measures (average variance extracted).Off-diagonal elements are the correlations amongst constructs.

Table 5Effects on endogenous variables.

Effects on endogenousvariables

Direct effect t-value(bootstrap)

Explainedvariance

Suppliers/partners (R2 = 0.675/Q2 = 0.506)H2: Process methodology 0.821 ⁎⁎⁎ 30.1145 67.45%

Knowledge (R2 = 0.798/Q2 = 0535)H1: Process methodology 0.253 ⁎⁎⁎ 3.4816 20.4%H3: Suppliers/partners 0.674 ⁎⁎⁎ 9.559 56.05%

Key business results (R2 = 0.458/Q2 = 0.417)H4: Knowledge 0.677 ⁎⁎⁎ 12.8322 45.83%

t(0.05, 4999) = 1.645, t(0.01. 4999) = 2.327, t(0.001, 4999) = 3.092.Sig. denotes a significant direct effect at 0.05.Bootstrapping based on n = 5.000 subsamples.⁎⁎⁎ p b 0.001, (based on t(4999), one-tailed test).


suppliers/partners variable when explaining the explainedvariance of the knowledge variable (56%).

In order to be able to compare the proposed hypotheses, theprecision and stability of the obtained estimations must beassessed. For this purpose the Bootstrap technique was usedwhich offers the standard error and the t values of the parameters.Following Roldán and Sánchez-Franco (2012), there was ageneration of a Bootstrap proof of 5,000 subsamples and aone-tailed Student t distribution with (n−1) degrees of freedom,where n is the number of subsamples to calculate the significanceof the path coefficients. From these levels, the significance of thestructural routes is obtained and, therefore, the support or not ofthe hypotheses (Table 5). Specifically, the 4 hypotheses proposedin the research have been confirmed with important levels ofsignificance.

The Stone–Geisser (Q2) test was used as a criterion tomeasure the predictive relevance of the dependent constructs.According to Chin (2010), if Q2 N 0, the construct haspredictive relevance. In our model all the Q2 values of thedependent constructs display values above 0.41 (Table 5)which is why it can be said the model has predictive relevance.

Fig. 6. Structural m


5. Discussion and conclusions

The results support the reliability and validity of themeasurement model (Tables 3 and 4), and hence the highpredictive power of the EFQM model as a framework for theimplementation of a KMP. It presents explained variance (R2)values over 0.417, as can be observed in Table 4 and Fig. 6.Moreover, the proposed model shows a high predictivevalidity, since the Q2 coefficient value is above 0 (Table 5).Hence, the reliability and validity of the EFQM ExcellenceModel for the TQM implementation has been widely studied inthe literature (Calvo-Mora et al., 2014b). However, there are nostudies which analyse the validity of the EFQM Model as aframework for the implementation of KM initiatives. Only Ooi(2009) uses the TQM critical factors present in the MBNQA tostudy their relationship with the phases of the KM process.Moreover, there are few studies that analyse the effects of theTQM and KM practises on organisational results.

odel results.


image of Fig.�6



More specifically, our research findings show how processmethodology plays a critical role in the model that a KMPrepresents. Thus, process methodology exerts a significantdirect influence on knowledge (H1) and on supplier and partnermanagement (H2). In addition, it also exerts an indirectinfluence on the key results of the business through thesevariables (Table 6).

The importance of this factor is also reflected in the highpercentage of variance explained (R2) both by the Knowledgevariable (20.4%) and the suppliers/partners variable (67.45%).Ju et al. (2006) and Asif et al. (2013) corroborate how processmanagement can be used by the companies as a base orplatform to strengthen the implementation of KM.

The involvement of the main suppliers and partners is also acritical variable in the KMPs as evidenced by the very highinfluence on knowledge (H3) which explains 56.05% of itsvariance (Table 5). Daud and Yusoff (2011) consider that TQMsoft factors, amongst which are found the contacts withsuppliers and professional associates, favour the developmentof the KM process. In addition, the supplier and partnermanagement indirectly affects the key results of the business(Table 6).

Finally, it must be emphasised how the specific efforts madeby companies to manage their knowledge have a significantinfluence on the key strategic and operational results of thebusiness (H4), with this variable explaining, by itself, the45.83% variance of the key results variable of the business. TaríGuilló and García-Fernández (2013) find positive relationshipsbetween the KM process and strategic results. In addition,studies such as those by Lee and Choi (2003) and Zack et al.(2009) confirm the influence of KM on the operational results.

In short, KMPs do not make sense if they are not developedsystematically, as can be seen in the direct and indirectsignificant relationships that exist between the variables of themodel. To be competitive, organisations need to continuouslygenerate and assimilate knowledge and new capabilities.Therefore, TQM as a management philosophy based oncontinuous improvement, innovation and learning, and putinto practise through the reference framework offered by theEFQM Excellence Model, can serve as a context and supportfor the start-up and later development of a KMP.

In practise, a series of obstacles can occur that complicatethe implementation of a KMP, such as the integration of KM inthe daily management of the organisation; the lack of effectivetools to facilitate the KM process; or the cost of the information

Table 6Indirect effect.

Structural path Indirect effect

Process methodology → Knowledge → Keybusiness results

0.253 × 0.677 = 0.171

Process methodology → Suppliers/Partners →Knowledge → Key business results

0.821 × 0.674 × 0.677 =0.375

Total 0.546Suppliers/Partners → Knowledge → Keybusiness results

0.674 × 0.677

Total 0.456


technologies (Lee and Choi, 2003). Therefore, the organisa-tions must design projects or systems that are supported in anorganisational structure, processes and cultural values (contin-uous improvement, innovation, learning) which promotecommunication, motivation, and confidence between peopleand groups (Alavi and Leidner, 2001; Mir and Pinnington,2014). The previous existence of a quality management system,such as that proposed by the EFQM Excellence Model, cancontribute proven management practises and very valuableexperiences that are consistent with the critical factors for thesuccess of the implementation of a KMP.

5.1. Implications for management

The horizontal reading of the EFQM Excellence Modelthrough the transverse axes allows the important organisationalmanagement concepts to be analysed that are not contemplatedin the vertical reading. Furthermore, it facilitates the identifi-cation of strong points and areas for improvement whenanalysing the different processes that cross the functional areasof the organisation. In addition, it allows the development ofaction and improvement plans. Accordingly, when an organi-sation makes an EFQM self-assessment it obtains a highnumber of improvement actions. The problem arises when weneed to select those actions that have a greater impact on theimportant management areas of the organisation. Thus, if theorganisation has identified its key transverse axes, it can designspecific improvement plans based on the sub-criteria of theselected axes and the results obtained in the self-assessment.Hence, our study shows that organisations can use the EFQMExcellence Model as the basis for designing, implementing andmonitoring its KMP. In addition, they can use the synergiescontributed by the criteria of the EFQM Excellence Model andthe critical factors of the TQM so that the implementation isfaster and successful.

Generally, it can be stated that the companies whichimplement the principles and practises of TQM can improvetheir key results, strengthening the value of knowledge. Toachieve this they will have to implement process methodologyand maintain fluid and confident relationships with their mainsuppliers and partners. More specifically, the top managementmust provide a context in which the workers and partnersparticipate in the design, development, implementation andcontinuous improvement of the key processes. In addition,policy and strategy must be communicated and deployed bymeans of a scheme of key processes which includes the transferand application of the strategic knowledge for the company.

6. Limitations and future research lines

The interpretation of the results and conclusions of this studyare subject to a series of limitations, principally of a methodo-logical character. The first limitation is due to the technique usedfor the proposed model: structural equation modelling, whichassumes the linearity of relationships between the latentvariables. The second is related to the notion of causality. Ourstudy has considered a soft modelling approach oriented more




towards prediction than causality. Thirdly, the design of theresearch is cross-sectional instead of longitudinal. Objectively,the improvement and learning processes need time to producemore significant effects, so that their effectiveness can beevaluated more exactly. Finally, the conclusions reached cannotbe completely generalised as they have been formed from a studypertaining to a geographic context and a specific businessmanagement style.

The indicated limitations constitute challenges for thedevelopment of new research. In addition, future studies couldapproach questions that have not been considered in the presentresearch, such as: (1) To check if the results obtained with ourresearch can be replicated segmenting the sample by size,ownership of capital and economic sector. (2) To check if themodel used in our research is still valid when changing the keyresults for other outcomes referred to within the EFQMExcellence Model (people, clients or society). (3) To design andtest the predictive power over the key results of other structuralmodels using criteria agents and axes of the EFQM ExcellenceModel as variables in a combined manner (i.e. organisationalgovernment, human resource management or innovation andcreativity).

Conflict of interest

None.

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http://dx.doi.org/10.3846/16111699.2013.776627

http://dx.doi.org/10.3846/16111699.2013.776627































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